Amtrak, a publicly funded enterprise, has been hemorrhaging money for years. The quasi-public corporation has wasted billions of tax payer dollars - but the liberal media blames the GOP.
WASHINGTON, May 18, 2015 − Amtrak has found itself front and center in the headlines this past week after a train derailment that resulted in the death of eight people in Philadelphia.
Investigators are still trying to determine the cause of this tragic accident, which has also exposed many less than flattering truths regarding the day to day operations of Amtrak. The derailment also highlighted the lengths some on the left are willing to go to disparage the GOP.
Before the death toll had even been confirmed, media outlets were blaming budget cuts. Less than 24 hours after the accident, left-wing media outlets were incorrectly reporting that GOP budget cuts had contributed to the crash, even when official conclusions had yet to be reached on the cause of the derailment, besides the clearly excessive speed at which the train was traveling.
Rachel Maddow, and many others, cited a crumbling infrastructure as the crash culprit, immediately concluding that Congress (i.e., the Republican Congress) was solely to blame.
As it turns out, the budgeted system that was supposed to have activated to prevent this type of accident was not yet activated on the curve where the accident took place. This was not due to a lack of funding. Instead, the problem was attributed to delays linked to ongoing complications with another federal agency, the Federal Communications Commission (FCC). But those issues appear to have been resolved in March.
The truth is that Amtrak, a publicly funded enterprise, has been hemorrhaging money for years at a blistering pace. This quasi-public corporation has wasted billions of taxpayer dollars over the course of its troubled existence and it has never made a fiscal year profit in its history. Not once.
This soviet-style operation, as Congressman John Mica, R-Fla., described it, directs almost every dollar it earns to paying union-inflated salaries, benefits and bonuses rather than to upgrading its safety measures as it has been required to do. The bankrupt Amtrak bureaucracy was actually caught paying bonuses to employees who weren’t even eligible for them, later refusing to take the money back as directed.
Perhaps the most frustrating aspect of Amtrak’s financial disaster is that there is a clear path to profitability that they have never chosen to take. There are only a few rail lines in the Amtrak system that make money or are close to being profitable. The rest lose money by the bucketload every year. Amtrak operates about 15 “long haul” routes that regularly lose almost $600 million a year. Rather than drop those routes to focus on the few routes that actually make money, Amtrak continues to throw taxpayer money down the drain.
It gets worse. Over the last 10 years, Amtrak has lost over $800 million in food sales alone. In 1981, Congress required Amtrak’s food and beverage service to break even. No matter. It has yet to happen.
For example, the company charges $2 for a soda despite the fact that each soda costs them $3.50 to acquire. Not only that, it has been reported that the rail line is losing up to $7 million a year in employee food theft alone. The idea that Amtrak doesn’t have the money for safety upgrades is simply false.
All across the world, civilized countries have opted to privatize and de-regulate rail systems to encourage profitability. And it’s worked.
The American passenger rail system remains quite primitive compared to the rail systems of Europe. A big reason for this difference is the privatization and competition that has taken place in European passenger rail systems. In the United States, a country generally considered on the forefront of freedom and innovation in business, we currently lag considerably behind the Europeans when it comes to this transportation issue.
The notion that Amtrak has not received proper funding is simply not based on facts. Amtrak received $1.3 billion from President Obama’s stimulus package in addition to its $1.4 billion annual budget. A total of $40 billion worth of federal subsidies have been spent on Amtrak since 1971. Bottom line: Plenty of money is being spent on Amtrak. But much of it is being wasted.
Amtrak’s colossal historical tally of wasted taxpayer dollars negates the tired argument that budget cuts are behind the system’s consistently poor performance. With so many budgetary areas where money could be re-allocated in better ways, it is impossible to prove that the railroad’s deteriorating infrastructure is due to spending cuts.
Currently, Republicans are pushing for more cuts not because they are heartless robots who don’t care about rail safety but because they are the only ones confronting the fact that Amtrak needs to be held accountable for the money they waste every year. Rewarding such a poorly managed outfit with more funding would be a slap in the face to every American taxpayer.
As Jonah Goldberg articulately pointed out, when a tragedy occurs, whatever the cause, the answer from the left is always more funding. Regardless of how much money is spent, it’s never enough. By now, it is an undeniable fact that Amtrak has wasted millions of dollars during every year of its existence. Rather than focus on that reality, the media has chosen to attack Congress for not wasting more.
Amtrak, like many government-controlled agencies, is hemorrhaging money at an alarming rate. The answer to this issue is not throwing more money at the problem, but rather spending the money already in Amtrak’s budget in a reasonable way.
No proof exists that a bigger check from the federal government would have stopped this crash, given that it was likely attributable to a safety system that was supposed to have been completely installed and implemented.
The current Amtrak model is simply unsustainable. If the government is not able to provide a safe, efficient passenger rail system − which it has proven that it can’t − then the private sector should be allowed to step in and do it for them.Click here for reuse options!
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